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What the current state of the real estate market means for buyers and sellers

Castillo + Pardo — Tue, 20 Dec 2022 18:41:43 +0000

Much has been said about the real estate market, the rates, inflation and recession. Tons of [clickbait] articles are being written and we want to help give you peace of mind. Rest assured that wherever you are on the real estate ladder: if you are a buyer, a seller, a landlord or a tenant, you have made the right decisions so far. What matters is what you will do next.

For Buyers:

Panic buying is over (for now). It is true however, that properties in great locations and with unique characteristics, are still driving more than one offer and selling above the asking price – and slightly above in some cases – so it is [yet and it always will be] advisable that you have your pre-approval in place and all your documents sorted out. That way you will be ready to move on once we find the perfect home for you.
You have more choices. Although inventory remains low, or at least what we like to call “quality” inventory, and depending on your budget, Buyers can now explore the options out there, breathe easier and have more space to make a decision.
It is true that interest rates have largely affected the affordability of many buyers, but you still have the option to get into the market. You can now choose your rate (not a fixed one though) and go out to find your home. As rent prices hit an all-time high, it is worth considering buying vis-à-vis the historical upward trend in Toronto real estate prices.

For Sellers:

Forget about the value of your home or if you “missed” the train for not selling in February 2022. If you’re thinking about your home’s value based on what happened in the first quarter of this year, you are using an approach that will not help you to gain perspective of the market. We are certain that if you had the fortune of buying with us at any time in the last 10 years, you obtained the best price and conditions by the time you put your offer in.
Prices are solid and holding their ground because we are not being flooded with inventory and because our city drives most of the housing demand in Ontario. The adjustment in prices is temporary and you can congratulate yourself for owning a home in Toronto.
If you are on a variable rate mortgage and have reached the threshold rate, cut on unnecessary expenses and adjust your finances to “ride the wave” for now. This too shall pass and the rates will not remain high forever. Trust the fact that your home is shielding you and your money from inflation and helping to create wealth for you and your family down the road.

There is confidence in our real estate market and we are confident in our market. Do not make any decisions without the right advice. We are your real estate advisors and part of your wealth creation team. Just reach out to us for guidance, we’ve got you covered.

Get expert insights on the current real estate market. Book a Discovery Call with our team today to discuss your specific needs and make informed decisions about buying or selling. If you want to stay updated on market trends or real estate advice, follow us on social media!

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Toronto Market Report – Feb 2022

Claudia Pardo — Fri, 25 Mar 2022 17:38:32 +0000

TAKING A PULSE OF THE MARKET: OUR TORONTO MARKET REPORT FOR FEBRUARY 2022

The Toronto Real Estate Market continues its trend. We have compiled the most recent numbers for the City of Toronto. These are not statistics for the whole GTA so if you’d like to know the numbers for your specific location outside the M postal code districts, please reach out here, or follow our social media. We’ll be happy to provide you with information. Read on for more details on the Toronto Market Report for Feb 2022.

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The secret to selling a home : Staging & Design

Castillo + Pardo — Thu, 22 Aug 2019 15:52:27 +0000

The secret to selling a home: Staging & Design

We believe that home staging is incredibly important to creating the most value and end result in the sale of our client’s homes. Over the years, we have seen property values and end sale prices go up based on how the homes were presented during the selling process. Wouldn’t you want to buy a property if it was beautifully designed and you could actually picture yourself living there from the minute you walked in? The answer is unanimously and always; yes.

It is important to know that staging goes beyond placing furniture, it often involves interior design, minor maintenance to the property, proper lighting, landscaping, painting, among other things. For us, it is part of our responsibility as agents to assess the property and make the best recommendations possible that enable the properties to shine – this process is crucial to creating the best results for our clients! You might think this is too overwhelming, where do you even start? Don’t worry, that’s why we take care of all this for you.

Example of homes we recently staged (and sold) for our clients:

Here are the top 5 reasons why we work with a professional stager for all our client’s sales :

When the home is staged, it means that all rooms are carefully designed to create an emotional connection with the potential buyer. People can walk in and see themselves living in the space and imagine their day to day. They can immediately feel at home and there is much less translation and work to be done to close a sale.
Buyers can visualize what the space can look like for them. They can imagine their own furniture in the space and make a calculation of their own valuables and how these will fit in.
Enables the property photographs, video and virtual tour that we do to be incredibly inviting for potential buyers and attracts a lot more interest for visits and open houses.
Having a staged home enhances the market’s perception of the property’s value and can lead to higher offers.
It can generate more interested buyers generating multiple offers which usually translates into the best end sale price for the seller – many times going for higher than the most recent sale of a similar property in the building or neighbourhood.

All and all, home staging is key – the only downside (which is not really a downside) is that our clients sometimes love the home staging so much, they wonder why they are leaving when the space looks and feels so good! This is also something we can help with for our client’s new homes too!

Claudia + Jose

Have any questions to ask us? Contact Claudia & Jose

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Is it the right time to sell my property?

Castillo + Pardo — Thu, 22 Aug 2019 13:57:40 +0000

Is it the right time to sell my property?

More often than not our clients come to us wanting to sell a property. Any “salesperson” would love to just say “yes!” and convert that sale into a juicy commission. But for us, our priority is being engaged in protecting the best interests of our clients, before anything else! Sometimes selling is actually not the best idea or the right timing after all.

Our first reaction instead is to ask WHY? And again, more often than not, we see that expression of bewilderment on our clients’ face trying to find an answer to this short word. The truth behind their intention can have many reasons: they might think the market is hot and they can just cash out and use the proceeds of the sale – or whatever equity they might have gained – and just spend it; or they actually might think the market is going to crash and they MUST get out right now, move away and never come back, otherwise they will lose everything they’ve built up in the past years. Others have more personal reasons like wanting to “right-size”. Some are thinking about having kids and they currently live at a small place so need more space to accommodate the growing family, or the opposite, others have already done all this and now feel like they’d feel more comfortable with living in a smaller space and not having to worry about maintaining or up-keeping a larger home.

Once we’ve been able to understand and establish the motive behind our client’s interest in selling (or buying if that’s the case as sometimes the sale might also trigger a purchase) then we can provide them with a range of options that allows them to think further about their next step. Is selling really the right decision after all?

Some people have been predicting a bubble for at least the past 8 years in Toronto and yes, we understand, the signs were (are) there, the value of properties was going too high too fast, salaries have not increased at the same pace, it seemed like there was not enough demand to absorb the growing value, foreign people with lots of buying power were apparently driving prices up and the news, by not being as objective or doing proper research, showed the whole city was a ticking bomb, just waiting for that final second to bust the economy.

And yet, those who didn’t purchase anything in, just as a reference, 2012 – when the market seemed to adjust and prices started to fall slightly for a brief period, because of the new mortgage rules introduced in July that year – have seen a bachelor unit – just to name a type of property which serves as an entry point to the market for many – go from $180,000 to above 80% its price or almost doubling it in 2018-2019 *1. We don’t judge them, nor we blame them, we just think some people lacked having the right advisor on their side.

In the end, it’s not about just buying any property, it’s about buying the right property, and for this you need insight and knowledge, you need to also trust the source of advice. Some might even call it luck, just because they don’t want to be proven wrong. *2

So, let’s dive into it and see what your options are:

1. Selling your property:

Under this scenario, you will sell your property and use the proceeds of the sale for 1) Buying another property, 2) Investing in other markets (not necessarily real estate) or, 3) Providing your kids with some funds for them to buy real estate, among other possibilities. If you’re selling make sure you’re properly advised and follow the right steps:

Ask for a Comparative Market Analysis (CMA) that provides you with an idea of the market value of your property, not just a general idea of price.

Ask for explanations about how the sale process will unfold and how your day- to-day life will be affected.
Make sure a timeline is provided so you know what to expect.
Ask for information about the fees involved and what those fees include or not.

2. Converting your home into an income property:

That means that you don’t sell it but instead you use any equity in it to buy another property and you put your current home for lease.

Make sure to talk to your mortgage broker in order to confirm how much equity your property has generated since you bought it, to the eyes of the bank; how this equity can be used for the new purchase and how your monthly payments (cashflow) will be affected.
Make sure to confirm with your Realtor how much rent you can get for your current home so you can run your numbers accordingly.
Talk to your accountant to confirm how your income tax will be affected based on the new income and the fact that, when you decide to sell this property in the future, there will be a capital gain tax due on it after the date it’s not your principal residence any more.

3. Use the equity or a High Equity Line of Credit attached to your mortgage (if you have access to one) to make any changes/extensions that are possible to your current home:

Renovations can include among others:

Updating bathrooms/kitchen or any other interior areas that are worth renovating.
Improving critical systems in the property such as heating and cooling equipment or address structural issues in roofs or walls, or even waterproofing the basement.
If you have a basement with a separate entrance or walk-out, that you’re currently using as part of your home, look into the possibility of converting it into a rental unit for either long-term or short-term. Make sure to obtain proper advice on short-term rentals as rules for them in Toronto are still not completely defined and pending the results of a hearing scheduled for August 26th, 2019. Find more information in this link.
As of August 2018, the city of Toronto has allowed the construction of laneway suites in Toronto subject to some criteria. If your property fits the profile, you might want to consider building a laneway home and convert it into an income generating property or use it to host a family member. For more information and updates about laneway housing regulation, please visit this link.

Make sure to get the right advice when deciding if a renovation is the way to go. Anticipate and know what your life is going to look like while renovations take place, if you continue living at the property or if you need to move to another place in the meantime. Factor in all the possible expenses and compare it to the possible income you will receive to confirm that you’ll get the best return.

4. Use your equity to buy a second home:

Consider this option if you’re looking to have another home for recreational purposes and if you can afford to pay for it, its mortgage and any additional expenses that are attached to it (maintenance fees – if any, upkeep, property taxes, Etc.)

In the end, sometimes what we think may be the right decision, might be worth looking at in a different way. As Real Estate experts, we love to advise our clients towards making the very decisions for them and their families. Perhaps in your case it’s time to sell, and perhaps it’s not – depending on the circumstances. We hope our guide can help you to navigate towards your decision. Should you need any further recommendations, feel free to reach out to us directly and we would be happy to help.

Claudia & Jose

Have any questions to ask us? Contact Claudia & Jose

* 1. Some examples include: 1. 529-600 Fleet St (Sold in 2012 for $189,500 and sold in 2018 for $355,000); 2. 509 – 705 King St W (Sold in 2012 for $200,500 and sold in 2018 for $389,000); 3. 306 – 319 Carlaw Ave (Sold in 2012 for $265,000 and sold in 2018 for $502,000); 4. 706 – 319 Carlaw Ave (Sold in 2012 for $271,500 and sold in 2019 for $521,000). Some of these included minor renovations, others, no renovations at all.

* 2 Attention! This is catered to people who have considered Real Estate as an investment option. We understand some might have a better use of their money in other investment vehicles or might even find some important tax breaks in not owning real estate, but since not everyone has access to other levels and opportunities of investment, we want to make sure you have the right information at hand if you’ve ever considered real estate as an option.

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The family and friends mortgage is here!

Castillo + Pardo — Tue, 20 Aug 2019 16:09:34 +0000

All about the new Family & Friends mortgage.

As the housing market gets pricier, many Canadians wonder how they’ll ever be able to afford a home – particularly if they’re not in a conventional two-income family.

The Family + Friends Mortgage – a practical way for modern families and friends to join forces and pool their financial resources to afford a larger shared home. In fact, with this mortgage solution, we’ve made it easier than ever for up to four people to obtain a mortgage and take advantage of low rates.

Before you dive in to making your purchase or choosing a mortgage, we invite you to review this guide, filled with helpful suggestions, creative tips and food for thought on the smartest ways to share your investment, avoid pitfalls and make the most of living together.

DOWNLOAD THE FULL GUIDE

Have any questions to ask us? Contact Claudia & Jose

* Thank you to Alain Lavoie from Capital Home Lending for the Friends and Family Mortgage PDF.

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